Page 225 - IBC Orders us 7-CA Mukesh Mohan

Order Passed Under Sec 7
Hon’ble NCLT Ahmedabad Bench

7.12.2015 SCB also issued a demand notice to ESSAR. ESSAR failed to respond or to pay under the
demand notice. SCB on 18.4.2016 issued a notice under Section 434(1)(a) of the Companies Act, 1956.
ESSAR neglected to pay the amount within 21 days of the statutory notice. As on 22nd June, 2017, the

following were the outstanding amounts;

a) US $ 413,000,000 towards principal amount of the loan;

b) US $ 30,160,545.83 towards accrued interest of the loan; and

(c) US $ 95,187,481.61 towards all other outstanding amounts due and payable under the Facility

Agreement.

SCB stated that ESSAR has no bona fide, valid or legal defence in respect of the amounts payable to the
SCB. SCB also issued further notice on 17th November, 2015 stating that ESSAR is implementing a
scheme between it and its Secured Creditors without prior approval of SCB. Thereafter, on 10th

December, 2015, ESSAR wrote a letter to SCB requesting for a meeting of the Steering Committee of the
ESSAR's Indian Lenders to discuss about the dues payable to SCB. On 24th January, 2017, ESSAR

issued a letter to SCB suggesting a Debt Restructuring Proposal pursuant to which the outstanding
amount would be paid at the end of 25 years along with interest at 1% per annum. SCB rejected the said
Restructuring Proposal. SCB also wrote a letter dated 22nd February, 2017 to SBI stating that Debt

Restructuring Proposal was carried out without involvement and consent of SCB. SBI gave reply on 15th
March, 2017 stating that Lenders of ESSAR did not give their consent to the ESSAR for issuing the
Guarantee under the Facility Agreement. ESSAR issued a letter dated 4th April, 2017 to the SCB

acknowledging the debt owed under the Guarantee. SCB by letter dated 7th April, 2017 stated that the
consent of the lenders of the ESSAR is not necessary to enforce the Guarantee given by ESSAR. It is the
case of SCB that it was never invited to the Joint Lenders Forum ("JLF") and it was precluded from

participating in the JLF. SCB stated that ESSAR failed to respondent to the demands of the SCB and
therefore it initiated Corporate Insolvency Resolution Process in respect of ESSAR in the public interest

and for the benefit of all the creditors of ESSAR.

8. SCB filed true copy of Facility Agreement dated 3rd January, 2014; true copy of Amendment Letter
dated 2nd February 2014 amending Facility Agreement dated 3rd January, 2014; true copy of Statement
of Accounts; true copy of Annual Report of ESSAR for the years 2014-15 and 2015-16, and copies of

notices. SCB also proposed the name of Interim Insolvency Resolution Professional and filed his Written
Communication.

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